The federal Liberal government’s 2015 election platform was full of promises for “real change.” It contained a whole chapter outlining the party’s commitment to “evidence-based policy.” In its own words, “Government should base its policies on facts, not make up facts to suit a preferred policy. Common sense, good policy, and evidence about what works should guide the decisions that government makes.”

Yet, on Friday, the government announced upcoming changes to drug-price regulations that are the opposite of evidence-based policy and that will limit our access to new medicines.

The Patented Medicine Prices Review Board (PMPRB) is the federal government agency that regulates the prices of patented medicines in Canada. Its mandate is to ensure that the prices for patented medicines are not excessive. The government intends to change, and further complicate, the already questionable rules that the PMPRB uses to set the ceiling price for patented drugs.

There are lots of serious practical and technical problems associated with the multiple new rules proposed by the government. But more fundamentally, the rationale offered for these changes — that government needs to further “protect Canadians from excessive drug prices” — is totally contradicted by the regulator’s own data.

The rationale offered for these changes is contradicted by data

The PMPRB uses the median international price as the threshold to determine whether Canadian prices are excessive. There are seven countries used for comparison to Canada, including France, Germany, Italy, Sweden, Switzerland, the United Kingdom and the United States.

Data published in the PMPRB’s most recent annual report confirm that, adjusted for the market exchange rates of currencies, median international prices have been higher than Canadian prices for the last 16 years, as much as 25-per-cent higher in 2016. When the PMPRB used the mean (or average) prices, and adjusted currencies at purchasing-power parities, international prices for patented drugs were 51-per-cent higher than Canadian prices in 2016.

Despite these facts, the PMPRB has proposed expanding the current group of countries used for price comparisons from seven to 12, but excluding the United States and Switzerland, while adding Australia, Belgium, Japan, Netherlands, Norway, South Korea, and Spain. This is a blatant attempt to bias the price ceiling downward by excluding higher-priced markets and adding lower-priced markets.

It is blatantly attempting to bias the price ceiling downward

And again, the regulator’s own data advise against this change. The PMPRB’s annual report shows that most of the 12 countries that will be compared to Canada had lower price levels for new (or patented) drugs. Meanwhile, another PMPRB report showed that new drugs were also less available to patients in those countries as well, as indicated by fewer launches of new drugs in those markets. For those who believe this is a mere coincidence, a recent analysis by the Canadian Health Policy Institute (CHPI) offers more scientific proof.

Using data from the PMPRB and the Organization for Economic Cooperation and Development (OECD), CHPI tested the correlation between the number of new drug launches and three independent variables: the price level for patented drugs, the per capita GDP and the total market size (population) in each of 31 OECD countries. Market price level was the only variable that was a valid predictor of the number of new drug launches. The analysis confirmed that lower-priced markets experienced fewer new drug launches, and vice versa — higher-priced markets tended to experience more new drug launches.

An objective analysis of the PMPRB’s own data strongly suggests that any regulatory change that ends up arbitrarily depressing prices runs the risk of reducing the availability of new medicines for Canadian patients. There is no evidence-based justification for expanding the scope or complexity of existing price regulations for patented drugs. Policy-makers should reject the PMPRB’s proposed regulatory changes. They are unnecessary and will almost certainly reduce access to new medicines for Canadian patients.

Brett Skinner is founder and CEO of the Canadian Health Policy Institute.